The blight fight: 314 new local homeowners as a result of Wells Fargo settlement

The City of Memphis and Shelby County settled a $7.5 million lawsuit against Wells Fargo Bank, garnering funds for first time homebuyer assistance and other local programs. As a result, 314 low-income Memphians are now new homeowners.

The landmark lawsuit, spearheaded by Mayor A C Wharton in 2009, targeted the national bank for predatory lending practices dating back to 2000. The City Attorney’s office alleged that the discriminatory and high-priced loans brought about damage to the community in terms of foreclosures, falling property values and increased demands on fire and police services.

Of the entire settlement, $3 million is allotted to blight abatement programs and $7.5 million went towards the Memphis-Shelby County Helping Homebuyers Program. MSCHHP kicked off in 2012, and funds were exhausted by fall 2014.

United Housing, Inc. administered the funds for MSCHHP, which totaled upwards of $15,000 in individual non-reimbursable loans. Thirty-one ZIP codes were affected with over $3.5 million in positive impact on local realtors and banks.

Additionally, Wells Fargo set aside a $425 million in a lending fund for local residents for the five years following the settlement.

“Aside from the $4.5 million of lawsuit settlement funds used for the down payment assistance program, the remainder of the immediate settlement funds allowed the City to match other grants and obtain even more money for fighting blight issues,” Mayor Wharton said. “$1.6 million dollars were used to match the Bloomberg grant targeted toward fighting blight, gangs and guns.  $800,000 went to pay the attorneys’ fees for representing the City/County in the lawsuit, and $600,000 was allotted to Shelby County government for their own blight fighting initiatives.”